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masha68 [24]
2 years ago
9

What is moral hazard? It refers to the actions people take before they enter into a transaction so as to mislead the other party

to the transaction. It refers to the actions people take after they have entered into a transaction that makes the other party to the transaction worse off. It refers to the situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction. It refers to the private, self-interested actions that people pursue, which when taken collectively leads to a loss in economic surplus.
Business
1 answer:
algol132 years ago
5 0

Answer: Option (a) is correct.

Explanation:

Moral hazard is a type of risk that one of the party has not entered into the agreement with a good intention. Also, they may provide incorrect or misleading information about them to take an advantage from acting opposite to the laid principles.

These type of activities mostly occurred in the lending and insurance industries where defaulters were not provided the true information about their work and business.

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Sanchez Company's output for the current period was assigned a $400,000 standard direct labor cost. The direct labor variances i
o-na [289]

Answer:

$406,000

Explanation:

Calculation to determine the actual total direct labor cost for the current period

Using this formula

Actual direct labor cost=Standard direct labor cost + unfavorable rate variance - favorable efficiency variance

Let plug in the formula

Actual direct labor cost=$400,000 + $10,000 - $4,000

Actual direct labor cost= $406,000

Therefore the actual total direct labor cost for the current period is $406,000

5 0
3 years ago
A business which spills oil that impacts land on which homes and businesses are built,but which compensate those whom it injures
uranmaximum [27]
False the business must assist in clean up if homes
4 0
3 years ago
Read 2 more answers
for $32.45 per share, and the firm expects its per-share dividend to be $2.35 in one year. Analysts project the firm’s growth ra
Serggg [28]

Answer:

Cost of equity will be 12.96 %

Explanation:

We have given current price of the stock = $32.45

Expected dividend D_1=$2.35 in one year

Growth rate g=5.72%=0.0572

We have to find the cost of equity

Cost of equity is given by

Cost of equity =\frac{expected\ dividend}{current\ price\ of\ the \ stock}+growth\ rate=\frac{2.35}{32.45}+0.0572=0.1296 = 12.96 %

8 0
2 years ago
Miracle Clean's variable costs are $3.00 per bottle and Fixed Expenses are $350,000 per year. The company currently sells 150,00
DerKrebs [107]

Answer:

131,250= number of units

Explanation:

Giving the following information:

<u>We need to calculate the number of units to be sold to maintain a profit of $175,000.</u>

Unitary variable cost= $3

Fixed expenses= $350,000

Selling price= $7

Net income= total contribution margin - fixed cost

175,000= number of units*(7 - 3) - 350,000

525,000 = number of units*4

525,000 / 4= number of units

131,250= number of units

7 0
3 years ago
Smith Company gives the following information on the financial statements: Net Income $50,000 Preferred Dividends 8,000 Average
ch4aika [34]

Answer: The rate of return on common stockholder’s equity is 23%.

Explanation:

Given that,

Net Income = $50,000

Preferred Dividends = 8,000

Average Common Stockholder’s Equity = 180,000

Average number of Common Shares Outstanding = 250,000 shares

Market Price = $2 per share

Therefore,

Return on equity = \frac{Net\ income - Preferred\ Dividends}{stockholder\ equity}

=  \frac{50000 - 8000}{180000}

= 23%

5 0
2 years ago
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